By Craig Wilson — Digital Marketing Consultant at Sticky Digital
Key Takeaways
- Understanding your cost-per-lead (CPL) is essential for Google Ads success
- ROI helps you measure the real value of your ad spend
- Tracking conversions, profit margins, and customer lifetime value are key metrics
- Newcastle SMEs can make better marketing decisions with simple, consistent maths
Why You Can’t Ignore the Numbers
Running Google Ads without tracking your numbers is like flying blind. You might be getting clicks, but are they turning into leads? More importantly — are those leads turning into profit?
For Newcastle SMEs investing in online advertising, understanding cost-per-lead (CPL) and return on investment (ROI) is the key to knowing whether your campaign is working — or wasting money.
Here’s how to calculate both in practical terms, using real-world examples.
What Is Cost‑Per‑Lead (CPL)?
CPL = Total Ad Spend ÷ Number of Leads Generated
This metric tells you how much you’re paying to generate a single lead from your Google Ads campaign.
Example:
- Total monthly ad spend: $1,200
- Leads received via phone, form, or booking: 24
- $1,200 ÷ 24 = $50 per lead
Is that good? It depends. Let’s look at the value of your leads.
What Is Return on Investment (ROI)?
ROI = (Revenue – Cost) ÷ Cost
This tells you how much profit you make for every dollar you spend on ads.
Example:
- Revenue from Google Ads leads: $6,000
- Cost of ads: $1,200
- ($6,000 – $1,200) ÷ $1,200 = 4.0 (or 400% ROI)
This means for every $1 you spend, you get $4 back. That’s strong.
How to Track Leads from Google Ads
Accurate CPL and ROI depend on reliable tracking. Here’s what to set up:
- Conversion tracking in Google Ads (form fills, calls, bookings)
- Call tracking software (e.g. CallRail or Google forwarding numbers)
- UTM parameters in URLs for Google Analytics
- CRM integration to track leads through your sales funnel
Need help setting that up? We do it all as part of our Google Ads service.
Factors That Affect CPL & ROI
✅ Click-Through Rate (CTR)
Better ad copy and targeting = more clicks for less cost
✅ Landing Page Experience
High-converting landing pages lower your CPL dramatically
✅ Sales Process
If your team doesn’t follow up fast, leads go cold — which skews your ROI
✅ Industry Benchmarks
A $30 CPL might be high for one business, but great for another depending on average sale value
Calculate Your Break-Even CPL
Break-even CPL = Profit per Sale ÷ Close Rate
Let’s say:
- You make $400 profit per new customer
- You close 1 in 5 leads (20%)
$400 ÷ 0.2 = $80 break-even CPL
So, if your CPL is under $80, your campaign is profitable.
FAQs
What is a good cost-per-lead for Google Ads in Newcastle?
It varies by industry, but for most local services, $30–$80 per lead is competitive. High-ticket services may tolerate higher CPLs.
How do I know if my campaign is profitable?
Track your CPL and ROI monthly. If your ROI is above 100%, you’re making a profit. Keep refining for more efficiency.
Can I calculate ROI without exact profit data?
You can estimate it using average sale value and close rate. But accurate data gives you more confidence and control.
How Sticky Digital Can Help
At Sticky Digital, we don’t just run Google Ads — we make sure the numbers stack up.
We help Newcastle SMEs track every lead, calculate cost-per-lead, and optimise campaigns for real profitability. No fluff, just results.
Want to know if your Google Ads are working — or wasting?
Contact us now for a free campaign audit and cost-per-lead breakdown.
